Risk assessment and options in project finance

Article Risk Management 1 December 1992

Project Management Journal

Woody, Wendy B. | Pourian, Heydar

How to cite this article:

Woody, W. B. & Pourian, H. (1992). Risk assessment and options in project finance. Project Management Journal, 23(4), 21–28.
Project finance is the arrangement of financial support by a sponsor to undertake a project purely for future cash flow, and solely for the purpose of that supporting that specific project. Many people are involved in the financial success of a project, each with separate risks. Potential sources of funds can come from banks, finance companies, private lenders, and other resources such as equipment vendors. These lenders all have an interest in assessing and minimizing their risks. Weaknesses in risk assessment may include overreliance on past performance, failing to evaluate the current market, failure to assess the larger financial condition of the developer, lack of information on the status of all projects of the developer, and overlending on certain projects. The different types of project finance are; nonrecourse project financing, limited recourse, highly leveraged transactions, off-balance-sheet, and equity and non-equity combinations.
member content locked

Become a PMI member to gain access

or Join

Advertisement

Advertisement

Related Content

  • Article Risk Management, PM in Academia 1 December 2022

    Project Management Journal

    Narratives of Project Risk Management member content locked

    By Green, Stuart D. | Dikmen, Irem The dominant narrative of project risk management pays homage to scientific rationality while conceptualizing risk as objective fact.

  • Article Risk Management, PM in Academia 1 April 2022

    Project Management Journal

    Identifying Subjective Perspectives on Managing Underground Risks at Schiphol Airport member content locked

    By Biersteker, Erwin | van Marrewijk, Alfons | Koppenjan, Joop Drawing on Renn’s model and following a Q methodology, we identify four risk management approaches among asset managers and project managers working at the Dutch Schiphol Airport.

  • Article Risk Management, PM in Academia 1 December 2021

    Project Management Journal

    Collective Mindfulness member content locked

    By Wang, Linzhuo | Müller, Ralf | Zhu, Fangwei | Yang, Xiaotian We investigated the mechanisms of collective mindfulness for megaproject organizational resilience prior to, during, and after recovery from crises.

  • Case Study Risk Management, Complexity, Energy & Utilities October 2021

    PMI Case Study

    Saudi Aramco member content open

    This in-depth case study outlines a project to increase productivity with Saudi Arabian public petroleum and natural gas company, Saudi Aramco.

  • Article Agile, Risk Management 1 May 2021

    PM Network

    The Certainty of Uncertainty member content open

    By Fewell, Jesse, As much as we yearn for a pre-pandemic return, it's naive to think the old ways of work will ever return—even for agile.

Advertisement